Gambling operators in the UK and Ireland have been hit by a dramatic drop in share price caused by the uncertainty associated with the coronavirus outbreak.
The outbreak has caused widespread turmoil in stock markets and financial centres around the world, and bookmakers have been hit hard. William Hill saw their shares drop nearly 25% at the end of last week, having previously halved since the end of February. And shares in the owner of Ladbrokes and Coral, GVC Holdings, had dropped around 20%.
Paddy Power Betfair owning company Flutter Entertainment saw a drop of 15% and gambling technology firm Playtech, whose Italian retail arm Snaitech has been hit by the closure of betting shops, have suffered a drop in share price of 15%.
According to share research firm Goodbody, fears over the cancellation of sports events as well as the possibility of betting shop closures were behind the drop in share price across the sector, which had already been hit hard by a number of regulatory changes over the last few months. The betting industry in Ireland and the UK has also been heavily criticised by political figures, leading to fears of further regulatory restrictions in the months ahead.
A market analyst at Goodbody, Gavin Kelleher, said that as well as the current uncertainty, there is also the wider fear over the long term future for the sector and the economy as a whole:
“Those are the immediate worries but if we see a prolonged period of economic weakness there is the question of how companies will be impacted by that – a economic recession is now likely in most people’s eyes. You will also have people thinking about if companies are indebted and have leverage, how does that impact them. All of these things are weighing on people’s minds.”
2020 was already shaping up to be a key year for betting firms, particularly Flutter Entertainment, which is currently preparing for a merger with the Stars Group, which could lead to the creation of the world’s biggest betting group, although it has yet to earn regulatory approval.